Correlation Between GoldMining and Liontrust Asset
Can any of the company-specific risk be diversified away by investing in both GoldMining and Liontrust Asset at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GoldMining and Liontrust Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Liontrust Asset Management, you can compare the effects of market volatilities on GoldMining and Liontrust Asset and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in GoldMining with a short position of Liontrust Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Liontrust Asset.
Diversification Opportunities for GoldMining and Liontrust Asset
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GoldMining and Liontrust is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Liontrust Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Liontrust Asset Mana and GoldMining is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on GoldMining are associated (or correlated) with Liontrust Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Liontrust Asset Mana has no effect on the direction of GoldMining i.e., GoldMining and Liontrust Asset go up and down completely randomly.
Pair Corralation between GoldMining and Liontrust Asset
Assuming the 90 days trading horizon GoldMining is expected to generate 1.8 times less return on investment than Liontrust Asset. But when comparing it to its historical volatility, GoldMining is 1.01 times less risky than Liontrust Asset. It trades about 0.13 of its potential returns per unit of risk. Liontrust Asset Management is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 40,750 in Liontrust Asset Management on November 18, 2024 and sell it today you would earn a total of 4,000 from holding Liontrust Asset Management or generate 9.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 68.18% |
| Values | Daily Returns |
GoldMining vs. Liontrust Asset Management
Performance |
| Timeline |
| GoldMining |
| Liontrust Asset Mana |
GoldMining and Liontrust Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Liontrust Asset
The main advantage of trading using opposite GoldMining and Liontrust Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining position performs unexpectedly, Liontrust Asset can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Liontrust Asset will offset losses from the drop in Liontrust Asset's long position.| GoldMining vs. Public Storage | GoldMining vs. Silver Bullet Data | GoldMining vs. Pfeiffer Vacuum Technology | GoldMining vs. Datagroup SE |
| Liontrust Asset vs. Wizz Air Holdings | Liontrust Asset vs. Ross Stores | Liontrust Asset vs. Alaska Air Group | Liontrust Asset vs. International Consolidated Airlines |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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